Wells Fargo fined over Wachovia investment sales

Violations of securities rules by Wachovia Securities in 2008 and 2009 have resulted in $2.7 million worth of fines and restitution for Wells Fargo & Co., which bought Wachovia at the end of 2008.

Wells Fargo, along with Citigroup, Morgan Stanley and UBS, will pay a total of $9.1 million in fines levied by the Financial Industry Regulatory Authority in a settlement of allegations they sold billions of dollars worth of risky and volatile investments to retail customers during that time without regard for whether those investments were appropriate for those customers.

FINRA fined the banks $7.3 million, and the banks will pay $1.8 million in restitution but not admit wrongdoing under the settlement.

The investments in questions were of so-called leveraged and inverse exchange-traded funds, which seek to multiply returns of a traditional market index through the use of complicated mechanisms such as futures contracts and swaps.